[News] China Bans Critical Mineral Exports to U.S. in Response to New Trade Controls

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According to a report from Commercial Times, in response to the U.S.’s new wave of semiconductor export control targeting China, China’s Ministry of Commerce announced on the 3rd that the export of dual-use items related to gallium, germanium, antimony, and superhard materials to the U.S. will generally be prohibited, and the restrictions will be effective immediately. Additionally, stricter reviews will be imposed on graphite-related dual-use item exports, as the report notes.

The report from Commercial Times indicates that these raw materials play a critical role in high-tech and defense industries.

As detailed in the report from Commercial Times, the restricted materials play crucial roles in various industries. Gallium and germanium are essential for producing semiconductors and advanced microprocessors. Antimony is critical for manufacturing military equipment, including armor-piercing shells, night vision goggles, and precision optical devices. Graphite is indispensable for producing batteries used in electric vehicles and other green energy systems.

According to a report from the Reuters, the new restrictions reinforce Beijing’s enforcement of existing limits on critical mineral exports introduced last year. These restrictions apply to the U.S. market, marking the latest escalation in trade tensions between the world’s two largest economies ahead of President-elect Donald Trump taking office next month.

The Reuters report highlights growing concerns that Beijing may expand these curbs to other critical minerals, such as nickel and cobalt, which have even broader industrial applications.

As for the reason behind China’s decision, China’s Ministry of Commerce states that the U.S. has weaponized trade and technology under the pretext of national security. According to the report from Commercial Times, China’s Ministry of Commerce claims that the U.S. has abused export control measures and unjustly restricted exports to China. China’s Ministry of Commerce argues that U.S.’s sanctions disrupt international trade rules and destabilize global supply chains, as the report from Commercial Times indicates.

China Machine Tool and Tool Builders’ Association, as cited in the report from Commercial Times, highlighted that China’s superhard materials industry is the largest globally, surpassing RMB 100 billion in output value. These materials are extensively used in advanced CNC machine tools, chip manufacturing, and automobile production.

The report from Commercial Times also mentions that, on the same day China’s Ministry of Commerce made the announcement, the Internet Association of China, the China Semiconductor Industry Association, and the China Association of Automobile Manufacturers collectively urged domestic enterprises to prioritize using chips manufactured within China.

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(Photo credit: Yunnan Germanium)

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